Capital outflows from China in the first quarter were the largest on record, a new report (pdf) from the Institute of International Finance (IIF) found.
According to data compiled by the IIF, foreign investors sold Chinese equities and bonds, with local currency bonds representing a majority of the outflows.
The world’s second-largest economy witnessed inflows, but outflows accelerated in February and March, marking the first three months of 2022 the worst on record.
A part of the reason for the sharp turn negative was Russia engaging in reserve sales, although it was not a driving force, the IIF noted.
“We think a combination of COVID lockdowns, depreciation, and perceived risk of investing in countries whose relationships with the West are complicated explain capital outflows from China,” the report noted.
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